Federal Government Seeks Millions In Reimbursements, Treble Damages, From Life Care Centers Of America

Friday, November 30, 2012

The federal government is seeking millions of dollars in reimbursements, plus treble damages, against Cleveland, Tn.,-based Life Care Centers of America as a result of two whistle blower lawsuits filed in federal court in Chattanooga in 2008.

The government intervened in the case overseen by Judge Sandy Mattice. The complaint was unsealed on Friday.

The suit says the government "brings this False Claims Act ("FCA") action against Life Care Centers of America, Inc.

("Life Care") to recover millions of dollars that Life Care caused the Medicare and TRICARE programs to pay for services that were not covered by the skilled nursing facility benefit, that were not medically reasonable and necessary, and that were not skilled in nature."

It says, "Medicare pays nursing facilities a daily rate to provide skilled nursing and skilled rehabilitation therapy services to qualifying Medicare patients (or "beneficiaries"). The daily rate that Medicare pays a nursing facility depends heavily on the rehabilitation needs of the beneficiaries. The highest daily rate that Medicare will pay a nursing facility is reserved for those beneficiaries that require "Ultra High" levels of skilled rehabilitation therapy, or a minimum of720 minutes per week of skilled therapy from at least two therapy disciplines (e.g., physical, occupational, and speech). The Ultra High therapy level is intended for the most clinically complex patients who require rehabilitative therapy well beyond the average amount of service time. TRICARE pays nursing facilities using the same system as Medicare.

"From at least 2006 to the present, Life Care, a large nursing home operator, engaged in a systematic scheme to maximize the number of days it billed to Medicare and TRICARE at the Ultra High level. Life Care accomplished this by setting aggressive Ultra Highrelated targets that were completely unrelated to its beneficiaries' actual conditions, diagnoses, or needs. Life Care then reinforced those targets at corporate meetings and presentations, through regular emails from or visits by corporate personnel, through employee performance evaluations, by imposing action plans on underperforming facilities, and various other means. While Life Care punished those facilities and employees that failed to meet its Ultra High targets or that complained about corporate pressure, it rewarded and applauded those that met its targets. As part of its goal to maximize Medicare and TRICARE payments, Life Care also frequently overrode or ignored the recommendations of its own therapists and unnecessarily delayed discharging beneficiaries from its facilities.

"As a direct result of Life Care's corporate pressure to maximize its Ultra harmful. Moreover, instead of providing skilled rehabilitation therapy that was tailored to beneficiaries' particular needs, Life Care therapists routinely provided generic, nonindividualized services that did not (and could not) benefit the beneficiaries and that served primarily to inflate what Life Care billed Medicare and TRICARE for those beneficiaries.

"Although Life Care received numerous complaints, from both inside and outside the company, that its corporate pressure to meet Ultra High targets was undermining the clinical judgment of its therapists at the expense of nursing home patients, Life Care largely ignored those complaints or else chastised or punished those who had complained.

"Life Care's corporate strategy and pressure succeeded in significantly increasing the number of days it billed at the Ultra High level and therefore inflating the money it received from Medicare and TRICARE. By 2008, for example, Life Care billed nearly 68 percent of its Medicare rehabilitation days at the Ultra High level-a level far in excess of the nationwide Ultra High average of 35 percent among all skilled nursing facilities during that same year.

"Because Life Care knowingly submitted false claims to the Medicare and TRICARE programs for medically unreasonable, unnecessary and unskilled therapy services, and used false records and statements to support those false claims, the United States brings this action to recover treble damages and civil penalties under the False Claims Act nd to recover damages and other monetary relief under the common law or equitable theories of unjust enrichment, disgorgement, and payment by mistake."

One complaint was brought by Glenda Martin, a registered nurse and a former staff development coordinator of Life Care Center of Morristown, Tn.

Another was by Tammie Taylor, a former occupational therapist of Life Care Center at Inverrary, in Lauderhill, Fla.

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